What does the recently-passed Medicare rate bill mean to healthcare providers?

Alan Hill | July 14th, 2010

 

It’s a mixed scenario for healthcare providers who accept Medicare patients. In late June, Congress passed a bill to once again extend Medicare payment rates to physicians, hospitals and other healthcare service providers until November 30, 2010.

The good news is that a nearly 22 percent decrease in Medicare rates for most services has once again been delayed.  More than a year ago, the mathematically-flawed formula for Medicare reimbursements calculated a nearly 22 percent decrease in Medicare rates for most services – a large decrease by anyone’s standards.  Both sides of the isle agree that this is a flawed formula.  However, Congress has postponed the decrease by approving a series of extensions to the current Medicare rates. So far, they’ve extended the current rates six times in the past year. The most recent extension, passed June 25th, has extended the cut till November 30, 2010 and provided a general 2 percent increase.

The bad news is that the Centers for Medicare and Medicaid Services (CMS) directed Medicare claims administration contractors to stop processing claims for services rendered on or after June 1 while the rate issue was worked out in Congress. CMS has now instructed its contractors to hold all claims for services rendered on or after June 1 while new updated rates are put into the system. The CMS expected that process to be completed by July 1. In the mean time, healthcare providers that submitted affected claims must sit and wait, losing valuable cash flow for their practices as well as inheriting additional administrative recordkeeping work.

The latest extension does not affect claims for dates of service prior to June 1. The CMS noted that claims containing June dates of service that were processed at the reduced Medicare rates will be automatically reprocessed.

Unfortunately, healthcare providers will continue to be at the mercy of Congress in determining their rates for services provided to Medicare patients after the November extension expires.

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